Benzinga Market Primer: Wednesday, January 9

Futures Flat On Global Weakness

U.S. equity futures were essentially unchanged overnight as fears over the health of the European economy and of growing credit risks in China spooked investors. Markets also await the interest rate decisions from the Bank of England and the European Central Bank Thursday.

Top News

In other news around the markets:

• Italy's deficit narrowed to 1.8 percent in the third quarter from 2.5 percent in the same period in 2011, showing that Monti's policies have been working.


• Alcoa AA officially kicked off fourth quarter earnings season by beating estimates. The company reported quarterly EPS of $0.21 vs. a loss of $0.18 per share a year ago.


• Germany sold 5-year notes to yield 0.53 percent, rising from the previous 0.41 percent, with the bid-to-cover ratio dropping to 1.8 from 1.9.


• S&P 500 futures rose 0.5 points to 1,452.80.


• The EUR/USD was lower at 1.3068.


• Spanish 10-year government bond yields rose to 5.113 percent.


• Italian 10-year government bond yields rose to 4.314 percent.


• Gold rose 0.08 percent to $1,663.70 per ounce.

Asian Markets

Asian shares were mostly higher overnight following the positive earnings release from Alcoa. The Japanese Nikkei Index rose 0.67 percent and the Shanghai Composite Index fell 0.03 percent and the Hang Seng Index rose 0.46 percent in Hong Kong. Also, the Korean Kospi fell 0.31 percent while Australian shares rose 0.38 percent.

European Markets

European shares were mostly higher in early trade led by Italian shares following the positive budget data. The Spanish Ibex Index rose rose 0.61 percent and the Italian MIB Index rose 1.09 percent in early trade. Meanwhile, the German DAX gained 0.07 percent and the French CAC rose 0.11 percent while U.K. shares rose 0.29 percent.

Commodities

Commodities were mixed overnight with energy futures declining on reports that U.S. output of oil will grow faster than expected over the next few years. WTI Crude futures fell 0.18 percent to $92.98 per barrel and Brent Crude futures fell 0.11 percent to $111.80 per barrel. Copper futures rose 0.41 percent as Chinese and Australian shares gained despite new fears over a growing credit bubble in China. Gold was higher and silver futures rose 0.03 percent to $30.48 per ounce.

Currencies

Currency markets were seemingly reversing moves from Tuesday overnight as the euro slipped and the yen weakened. The EUR/USD was slightly lower at 1.3068 and the dollar rose against the yen to 87.50. Overall, the Dollar Index rose 0.11 percent on strength against the yen, the euro, the Swiss franc and the Swedish krone. The AUD/USD was relatively flat overnight and the biggest mover was the AUD/JPY cross, moving 0.53 percent higher as traders piled into the carry-trade in hopes of unlocking yield differentials between the two countries.

Pre-Market Movers

Stocks moving in the pre-market included:

• Clearwire Corporation CLWR shares rose 8.56 percent pre-market as Dish Network DISH offered to buy the company at a higher price than Sprint S. Sprint shares traded 3.69 percent lower pre-market on the news.


• Alcoa AA shares rose 2.75 percent pre-market as the company beat earnings expectations after the close Tuesday.


• Microsoft MSFT shares rose 0.38 percent pre-market as Google GOOG withdrew a patent suit against the company.


• Bank of America BAC shares fell 1.19 percent pre-market as investors still digest the mortgage settlement announced earlier this week.

Earnings

Notable companies expected to report earnings Wednesday include:

• Constellation Brands STZ is expected to report third quarter EPS of $0.55 vs. $0.50 a year ago.


• Ruby Tuesday RT is expected to report a second quarter loss of $0.06 per shares vs. a loss of $0.03 per share a year ago.

Economics

On the economics calendar Wednesday, MBA Purchase Applications are set to be released and the Treasury is set to auction benchmark 10-year bonds. Overnight, the Chinese trade balance is set to be released and Italy and Spain are both set to auction bonds. These releases come ahead of the Bank of England and European Central Bank interest rate decisions.

Good luck and good trading.